Positive territory – for now
Property values continue their slow movement towards recovery this month, according to the monthly housing update by Core Logic, with 8/10ths of a percent value increase nationally (which is the best since Oct. 17), with Sydney values rising 1.6% (Best since Nov 16, but 13% lower since the market peaked).
In the report Tim Lawless notes a slight rate of credit growth, and expresses some concern about whether we are abandoning good sense in regards to our debt levels. He notes that while recent changes in APRA’s banking policies may be helping to ignite a more rapid than expected upturn, there is some concern that a too fast recovery – and taking into consideration the rising unemployment, low wages growth and ‘near record-high’ debt levels – if this trend continues regulators will undoubtedly make changes to keep debt from blossoming out of control and/or ‘encourage spending in other areas’. Core Logic covers this in more detail here. Elizabeth Knight, writing for the Sydney Morning Herald echoes this by noting that runaway housing prices – while great for some – are not the best thing in the current economic climate. The ABC also makes note that a potential ‘debt bomb’ similar to the 2008 GFC may be on the rise, and that this time Australia is in a much more vulnerable position.